17 February 2020 (closed)
USD/IDR (13,777) +42.00 +0.31%
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Jakarta Composite Index (5,867.52) +0.58 +0.01%
Two important indicators to measure the condition of an economy are car and cement sales as both statistics provide valuable information about people’s purchasing power (and consumer confidence) as well as infrastructure and property development. In the first quarter of 2015, Indonesia’s car and cement sales declined (compared to the same period in the preceding year), triggering concern that economic growth will fall accordingly. In the first quarter of 2014, Indonesia’s GDP growth had already slowed to 5.14 percent (y/y).
Regarding full-year 2014, economic expansion of Indonesia fell to a five-year low of 5.02 percent (y/y) amid global turmoil (low commodity prices impacting negatively on the country’s export performance) and domestic rebalancing (Bank Indonesia’s higher interest rate environment).
Indonesia's Quarterly GDP Growth 2012–2014 (annual % change):
|Year|| Quarter I
||Quarter II||Quarter III||Quarter IV|
Source: Statistics Indonesia (BPS)
According to the latest data from the Indonesian Automotive Industry Association (Gaikindo), Indonesian car sales (wholesale) declined 14 percent (y/y) to 282,250 vehicles in the first quarter of 2015. Amid slowing economic growth (a trend that started in 2011), Indonesians’ purchasing power has weakened, while Indonesian businesses are reluctant to purchase commercial vehicles due to the globe’s low commodity prices (which pressure operational costs). However, despite the negative figure at the start of 2015, Gaikindo has not altered its car sales target for 2015. The institution expects to see car sales reach 1.2 units this year, more-or-less flat from car sales in the preceding year.
Indonesian Car Sales (CBU):
|Month||Sold Cars 2012||Sold Cars 2013||Sold Cars 2014||Sold Cars 2015|
Meanwhile, Indonesian cement sales also fell in the first quarter of 2015. Based on data from the Indonesian Cement Association (ASI), sales declined 3.3 percent (y/y) to 13.6 million metric tons in the January-March period. Primary reason for this decline is that several infrastructure and property projects are still in the preparation stage. For example, the Indonesian government has not started its ambitious one million homes program yet. Last month, Indonesian President Joko Widodo announced that the government would support the construction of one million additional homes across the archipelago over the next five years (the groundbreaking of this project is scheduled for 30 April 2015).
Widodo Santoso, Chairman of the Indonesian Cement Association, added that the rainy season at the start of 2015 also led to the delay of several large projects. However, given the government’s commitment to boost infrastructure development, the association targets to see a total of 62 million metric tons of cement sales in 2015, up 3.3 percent from last year.
Indonesian Cement Sales 2008-2015:
|Year|| Cement Sales
|| YoY Growth
¹ ASI target
Source: Indonesian Cement Association (ASI)